Natural Gas Price Prediction – Prices Rebound as Cold Weather Edges South

Natural gas prices moved higher on Thursday despite a smaller than expected draw in natural gas inventories as reported by the Energy Information Administration on Thursday. The weather is expected to remain colder than normal in the west and warmer than normal in the east during the next 6-10 days, but the 8-14 day forecast is showing cooler air moving into down from Canada which is the first sign of a ridge trough pattern that could take prices higher.

Technicals

Natural gas prices were lower edged higher despite today’s inventory report. Prices are hovering below short term resistance near the 10-day moving average near 2.17. Support on natural gas prices can be seen by looking at a long term trend line on a weekly chart that comes in near 2.07. Momentum has now turned positive as the MACD (moving average convergence divergence) index generated a crossover buy signal. This occurs as the MACD index (the 12-day moving average minus the 26-day moving average) crosses above the MACD signal line (the 9-day moving average of the MACD line). The MACD histogram is printing in the black with a rising trajectory which points to higher prices. Short term momentum has turned positive as the fast stochastic rebounded from below the 20-oversold trigger level which points to a possible rebound.

Inventories Rose Less than Expected

The Department of Energy reported on Thursday that working gas in storage was 3,148 Bcf as of Friday, January 3, 2020. This represents a net decrease of 44 Bcf from the previous week. Expectations were for a 58 bcf decline according to survey provider Estimize. Stocks were 521 Bcf higher than last year at this time and 74 Bcf above the five-year average of 3,074 Bcf. At 3,148 Bcf, total working gas is within the five-year historical range.